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KLM Royal Dutch Airlines

Based in Amsterdam, KLM is the national airline of the Netherlands. Part of the Air France-KLM Group, KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. KLM is a founding member of the SkyTeam alliance.

Location of KLM Royal Dutch Airlines main hub (Amsterdam Schiphol Airport)


 
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2,267 total articles

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207 total articles

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TAP Portugal Part 2: bidders in its privatisation will focus on the airline's Brazil network

13-Oct-2014 10:00 PM

Savoy Capital, a potential bidder for TAP Portugal, has said that Portugal's Government "has to decide whether or not to exit the aviation business" (Dinheiro Vivo, 07-Oct-2014). Headed by ex-Continental Airlines president Frank Lorenzo, Savoy said that TAP has adopted a favourable strategy and the Lisbon hub is attractive.

If (as expected) the privatisation process is relaunched before the end of 2014, any potential bidder will need to be convinced that TAP can drive a more significant gap between its RASK and CASK in order to generate more attractive returns. Savoy seems to be the only non-airline company linked with a possible bid for TAP, for whom a strategic airline investor with a complementary route network might be the best option.

Following our recent analysis of TAP's financial performance, this second report on TAP looks at its key strategic asset: its Latin American network, in particular its operations to Brazil. We consider those airlines to whom TAP's position in this market may be of interest and so who may be preparing to make a bid in the privatisation.

Delta Air Lines trims 3Q2014 unit revenue targets due to overcapacity and other global challenges

6-Oct-2014 5:40 PM

Delta Air Lines has slightly adjusted its passenger unit revenue targets for 3Q2014 triggered by oversupply in some of its markets, unrest in the Middle East and the Ebola outbreak in Africa.

The airline has previously warned of tougher year-on-year comparisons in 3Q2014 after recording 7% unit revenue growth in 3Q2013. But despite the challenges that have cropped up during the last few months, Delta still predicts a strong performance in the quarter with double digit operating margin expansion and solid cost containment as demand in the US domestic market remains strong.

As it prepares to make trans-Atlantic capacity adjustments for the US winter time period in conjunction with its SkyTeam alliance partners, Delta is also making changes in it Pacific network by down-gauging Boeing 747s it operates to Tokyo and replacing them with smaller and more efficient aircraft.

Air France-KLM's new plan to grow LCC Transavia has taken too long; a union confrontation looms

14-Sep-2014 2:23 PM

At its recent Investor Day, Air France-KLM gave details of its 'Perform 2020' five-year industrial plan, originally outlined in Jul-2014. Much of it is a continuation of 'Transform 2015': discipline over capacity and capital, further unit cost reduction (at 1% to 1.5% pa) and further balance sheet fixing. It also involves more restructuring of the short and medium haul passenger business, including a more aggressive expansion of LCC Transavia from 44 aircraft this summer to 100 in 2017, a further cuts in the full freighter fleet and growth in the more profitable maintenance business.

Perform 2020 moves Air France-KLM in the right direction, but the pace of change is glacial. The group's profitability lags its main rivals' as it continues to be hamstrung by legacy issues such as union power. Transavia is a genuine low-cost operator, but, since its French arm started in 2007, its total fleet has grown by 16 aircraft, close to 60%. Over the same period, the combined fleets of Ryanair, easyJet and Norwegian have more than doubled, adding over 300 units. It has taken Air France-KLM far too long to wake up to its LCC's potential.

Europe's airlines: 1H2014 results season shows improving trend, but cost reduction is the key driver

7-Sep-2014 11:28 AM

Europe's airlines appear to be following a course to improved profitability, based on the 1H2014 results of the largest publicly quoted airline groups. Profits remain slender in most cases, but margins are improving in aggregate. Individually, financial performance varied widely, with LCCs both leading (Ryanair) and lagging (Norwegian) the operating profit margin rankings in 1H2014.

The European market offers volume growth, but is characterised by price pressure, with RASK falling for the majority of the larger airline groups and this points to the need for additional caution in capacity growth. The LCCs collectively enjoyed higher growth than the FSCs in 1H2014 and also achieved a more stable RASK performance (although not in all cases).

Profit improvement is largely being achieved through cost savings and CASK reduction. Although fuel prices are high on a longer term historic perspective, they are enjoying a period of relative stability and this has helped the cost picture. Although Europe's airline sector remains only thinly profitable, these 1H results hold out the prospect of better full year results in 2014 versus 2013.

China Eastern Airlines once again seeks a strategic investor to welcome it onto the world stage

6-Aug-2014 8:31 PM

Time has provided clarity for China Eastern Airlines. The failed 2007 bid of Singapore Airlines to purchase a stake in China Eastern Airlines left the Shanghai-based carrier with a sour taste as it lost the chance to find a partial solution to its weak performance and dwindling finances. Although at the time China Eastern threw its support behind the deal, which was derailed by competitors Air China and ultimately Cathay Pacific, in hindsight China Eastern may be glad the agreement did not go through.

Singapore Airlines was buying into China Eastern when it was weak; today China Eastern is stronger and is also more profitable than Singapore Airlines. China Eastern now worries SIA would have gained more than it put in.

These considerations are important as China Eastern continues to seek a strategic investor. China Eastern sees that quality must complement its size and an international partner could best help its internalisation. China Eastern is weary of an Asian airline investing in it but perhaps paradoxically wants an investment to mesh culturally.

IAG's 2Q results and reiterated profit targets set it apart from Lufthansa and Air France-KLM

3-Aug-2014 10:27 AM

International Airlines Group (IAG)'s 2Q2014 results revealed another strong improvement and 1H2014 recorded the first positive operating result for IAG since 2011. Unit revenues were under pressure and so the profit improvement was achieved by unit cost reductions.

All three of IAG's operating airlines - British Airways, Iberia and Vueling - improved their 2Q operating profit year on year, with BA and Iberia also recording higher margins.

Recognising the progress made by Iberia, which returned to operating profit in 2Q and 1H, IAG has announced that the Spanish airline will see 16 new wide bodies enter its fleet from 2015 to 2020 to replace A340 aircraft. A year ago, CAPA suggested that IAG might have reached a turning point. Its results since then, and its reiteration of its profit targets, appear to confirm that this was the case as it has outperformed its major European rivals Lufthansa and Air France-KLM.

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